Prof G Markets - Trump Fires BLS Chief, Elon’s $29B Pay Day & American Eagle Stock Soars Again

Episode Date: August 5, 2025

Ed breaks down Friday’s jobs data and the fallout from Trump that followed. Then Charles Elson, Founding Director of the Weinberg Center for Corporate Governance at the University of Delaware, returns to the show to explain why Tesla’s board approved a proposed $29 billion pay package for Elon Musk. Finally, Ed takes a look at what drove American Eagle’s stock up yesterday, and Kyla Scanlon joins the show to share what the saga reveals about markets today. Check out our latest Prof G Markets newsletter Order "The Algebra of Wealth" out now Subscribe to No Mercy / No Malice Follow Prof G Markets on Instagram Follow Ed on Instagram and X Follow Scott on Instagram Learn more about your ad choices. Visit podcastchoices.com/adchoices

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In the U.S., there are tons of ways to get where you're trying to go. Unless you're talking about taking the train. What's the state of high-speed rail here in the U.S.? Non-existence and terrible. That's this week on Explain It to Me. New episodes every Sunday, wherever you get your podcasts. Today's number, 300. That's how many times the average four-year-old laughs per day.

Meanwhile, the average 40-year-old laughs just four times per day, a very sadly low number. According to studies, that number can go even lower depending on your exposure to stress, anxiety, and Scott Galloway's dick jokes. Money markets matter. If money is evil, then that building is terrible. Welcome to Profite Markets. I'm Ed Elson. It is August 5th. Let's check in on yesterday's market vitals.

The major indices all rose, bouncing back from Friday's sell-off, the S&P 500 saw its strongest single-day rally since May. Oil fell after OPEC said it will increase production starting in September, and Palantir stock popped in after hour's trading after the company reported earnings that beat expectations. and hit $1 billion in revenue for the first time. Okay, what else is happening? Job growth stalled in July, and in response, Trump fired the nation's top labor statistician. The Bureau of Labor Statistics reported Friday that the U.S. added just 73,000 jobs in July and sharply revised the numbers for May and June downward. It was the largest downward revision since 1979, excluding COVID-era adjustments.

Hours later, Trump fired the commissioner of that agency, accusing her of manipulating data. On Truth Social, he said it was rigged in order to, quote, make the Republicans and me look bad. He also claimed that she, quote, faked the jobs numbers before the election to try and boost Kamala's chances of victory. The markets did not like any of this news

and the latest tariff blitz only compounded the trouble. The Dow fell over 1%. The S&P 500 fell 1.6% and the NASDAQ more than 2%. More than a trillion dollars in value was erased on Friday. It was the stock market's worst day in over two months. So here we are. It's a new week, and Trump is now set to appoint a new BLS commissioner in the coming days. Now, the funniest part of all of this is that actually the July jobs numbers were not that bad.

The real problem was this downward revision to the previous numbers. And what's so ironic about that is that this is the very thing that the Republicans used to accuse the Biden administration of doing, but in the other direction. The Republicans accused the Biden administration of fudging their original numbers and then quietly revising those numbers back down to the real number, which was all thought to be part of this deep state cover-up. Well, by that same logic, the commissioner was doing the same thing for Trump, the same thing she did for Biden. That is, come out with these great numbers in the initial report and then quietly revise them down later on. That was the thing that the Republicans complained about. But no, apparently

that rule no longer applies. This time, it's the revision that is the fake number. And it's the initial number that's real. The revision downward was fake. The real number is the one that was good. Put another way, when the data looks good under Biden, the BLS is lying. And when the data looks bad under Trump, the BLS is lying. So the BLS is only telling the truth when it makes Trump look good. That is what he told us this week. It's not hyperbole. It's not TDS. That is the reality. So we have now officially entered the part where the leader shoots the messenger for bringing the bad news. Oh, my job numbers are bad. You're fired. You think tariffs cause inflation. You want to keep interest rates high. You're fire. This is

where we are now. Now, you might be thinking, a lot of people are thinking, this story feels familiar. Where have I seen this story before? And you would be right, because the reality, which I pointed out on MSNBC last week, the reality is that this is a chapter in the story of almost every iconic villain in history. This is what Circey Lanister does in Game of Thrones. This is what Commodus does in Gladiator. This is what Voldemort does in how. Harry Potter, you receive an inconvenient truth from a subordinate, and in a fit of anger, you shoot the messenger, be it through public execution or through the Cruciatus curse, or in this case, through firing. And to be clear, I'm not saying Trump is Voldemort.

What I am saying, though, is that there is a reason that this has triggered such a strong emotional response from people and from the markets, and it's because they've seen this before in books and in movies and in cartoons. This is the classic evil dictator gets drunk on power move where you refuse to see the truth and you inflict pain on anyone who tries to put it in front of you. And I apologize for the hot take here, but the president behaving in ways that make him look like a Disney villain,

I think that's kind of a bad thing. I think we should try to not have that. And by the way, it's not just cartooning. villains that do this. It's real villains, too. This is what Mao did when his generals told him that his policies were causing a nationwide famine. This is what Stalin did when his aides brought him bad news about the harvest. This is what Putin does today. This is what Kim Jong-un does today. This is what they all do. There is a reason why this is a theme in both reality and fiction. There's a reason why shoot the messenger is this well-known idiom. It's because it happens. It's a very convenient

and effective strategy when you're in a position of power. If you need to lie about something, well, then it helps to have an incentive structure in your organization that promotes the lie. So punishing people who tell you the truth, that helps you. Rewarding people who tell the lie, that helps you too. That's why we see this over and over and over again. Nothing ever really changes. And so why on this occasion would we pretend that this is any different? I mean, seriously, this is getting out of control. And I know the comments are going to say he has Trump derangement syndrome. He's crying again online. I thought this was a market show. Why isn't he talking about markets? I am talking about markets. We're talking about the jobs

numbers, but the president just said the jobs numbers are fake. So yeah, we can't gloss over this very important detail. If we're going to talk about the economic data, we have to at least agree that the economic data is real. And the worst part about all of this, once we have Trump's pick for BLS chief, you just know it. All the liberals are going to say the same thing that the Republican said. They're going to say, nope, the data is compromised. The data is fake. That's where we're at. So look, we were already entering into a post-truth world where, you know, the line between data and narrative was already getting pretty blurry. But as of last week, I'm sorry to say, we have officially been blasted through the door. We're there now. Any data that comes out

of the government, that comes out of the Bureau of Labor Statistics, or any other government agency, As of now, that data is a matter of opinion, and that is a world that we're actually not familiar with. You know, perhaps Argentina is, perhaps China is, although if you start debating the data and you're an economist, you get disappeared. That's what happens there. But we are not familiar with this in America. Now, I'm not exactly sure what that's going to mean for this show when we talk about data and economics. I'm not exactly sure what it's going to mean for the study of economics itself. but what I am sure of is that this changes things.

This fundamentally changes things. And in our view, here at Prof G, this is the most bearish signal for truth and veracity in our economy to date. Elon Musk may be headed for a $29 billion payday. Over the weekend, the Tesla Board approved an interim pay package of 96 million shares. The pay package will vest over two years if Musk stays on as CEO or holds another key role. Tesla stock climbed 2% on Monday. As a reminder, Elon Musk's pay at Tesla has been the center of a years-long legal battle. Back in 2018, the Tesla board approved

a record-setting pay package for Musk worth up to $56 billion if certain milestones were met. it was the largest potential compensation opportunity ever observed in public markets. It was also 33 times higher than the nearest comparison, which was, by the way, Musk's prior compensation package. Shareholders approved the plan at the time, but a Tesla investor sued claiming Musk had too much control over the board. And in January 2024, a Delaware judge ruled that the pay plan was improperly granted and ordered that it be rescinded. The court said Tesla's board wasn't independent and Musk's influence dominated the decision-making process. The board has since appealed that ruling and the case is still pending in Delaware's Supreme Court. So while that

legal battle plays out, Tesla has offered Musk this new $29 billion package in order to, quote, keep Elon's energies focused. With the new shares, Musk would own nearly 16% of Tesla, a stake that would be worth more than $150 billion today. So to help us break down this latest compensation and what it means for Tesla, we are welcoming back Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware. Charles Elson, thank you very much for joining us again on Profty Markets. Great to be with you again, Ed. I would love to address you as Uncle Charles, but I'm told that's not professional, so I'm calling you Charles Elson.

That's what they call me I love it I feel like Chris Cuomo in 2020 Very true So Tesla has proposed this new package of $29 billion for Elon Musk The question I have for you Where does this fit

in terms of the legal dispute With the Delaware Court of Chancery Does this solve the problem Well no it's an end run around the decision, basically, if you think about it. And the decision said this package was no good. It explained why. And suddenly a new package appears that basically is very similar to the old package. But it's done in a way that it looks like it's a new package. And they've said that if the Delaware court approves the old package, the Supreme Court proves it, then they will drop this

and it go back to the old. But if the Supreme Court doesn't and strikes it down, then this will be the new package. But remember, they move from Delaware to Texas. And in Texas, there's a different sort of regime, if you will. In Delaware, any shareholder could sue to block this. In Texas, there's a new rule in Texas. It said only a 3% shareholder or above can sue derivatively, which is what this claim would be. So basically, if the shareholders approve it, it's bulletproof, which is really kind of for the investors who oppose it is really a very problematic. That's really why they should, I thought, think state in Delaware. But also, if you think about it, if you can simply pick up and move somewhere else to

avoid a judicial ruling, there's something really wrong there. Actually, in the end, what it will do is if you go to Texas and you can't bring an action, it just means people own stock or unhappy will, A, probably not invest. and a venture that doesn't respect them, or B, if they do, it will be through debt, contract. Because a debt, you can always contract your way to remedies, really, and have it enforced by a court. Can't do that with equity. The court is critical to equity, protection of equity. And that's what Delaware was about.

Right. But obviously, someone thinks differently. What would you say to the shareholders who say, no, we do want this? And there are many of those shareholders. They voted 77% that we want to give him the $56 billion. And point taken, I'm sure there are investors out there who say, no, that's too much, that's excessive. But I think, you know, the counter argument to what you're saying is, you know, the shareholders said we like it, we like that package. The Delaware court says that doesn't make any sense.

And I think a lot of people would say, well, why is it up to Delaware to decide what's reasonable? If the shareholders like it, then they can vote for it. Well, I think the issue was protection of minority capital. Look, some shareholders did like it. A lot of them didn't and voted against it. Quite a few didn't. It voted against it. And the danger is if you basically give the minority's money away, next time you won't get minority capital.

I mean, critical of the system is protection of all investors. And something like this, where a court has said the process that led to it was highly flawed, that they critique the independence or lack thereof of the board. And the Sunday said it was problematic because it didn't incentivize someone. This is the same story. Someone who has that much stock in the company doesn't need to be incentivized to stick with it. He's got, at this point, billions of dollars in the company. Why in the world do you have to incent him to stay?

Yeah, I just want to read you a quote from the board's statement because this was the issue was how do you incentivize him? And the court said, you don't need $56 billion to incentivize the guy to go to work every day. Here was the board's quote in their new letter. They said, quote, retaining Elon is more important than ever before. we are confident that this award will incentivize Elon to remain at Tesla. So they're essentially saying, this is the amount of money we need just to get him to stay there. That's what we need to pay him.

So I guess my question to you is, one, do you believe that that is a good faith argument from the board? And two, what do you think is the right number? What's the reasonable number to get a world-class talent like Elon? We've got to give him his credit to stay at the company and keep working there. Well, number one, I just find it very unusual that they said, well, this is what will keep him there. Otherwise, he will go, I don't believe he'll leave. I just, I don't think it's in any, he's certainly not in his interest to leave. And frankly, how do you know you're going to get what should pay for anyway?

I mean, at this point, Tesla, yes, it hit heights, but we haven't seen such a fantastic Tesla of late. Tesla's got some real issues, and everyone knows that. So, and some of the issues it was argued may have been caused by him. His departure, the political issue, his actions hurt not just his own stake, but everyone else's. I just don't believe it takes something like that. And no one's that good. Let me ask you this. what happens if tomorrow he was cross the street and gets hit by a bus does the whole world stop

will tesla stop if he's hit by a bus let's say he wakes up tomorrow and says i just want to live on an island and i really don't care about anything i'm going to go bring some coconuts and sit there goodbye world the world isn't stopped no human being is so vital to the world that everything stops. I believe this approach is rather foolish. And frankly, if someone says to you, I'm threatened to leave or else, they're going to do it again. Exactly. It seems as though that there is a cult-ish vibe around him, which the market seems to agree is acceptable. And no one can imagine this world of a Tesla without Elon. And so they're willing to pay $30 billion to avoid that.

But just to go back to the original question, you know, you've had a lot of experience on a lot of different boards. You've worked with many CEOs. Again, what do you think is reasonable? I think it has to be negotiated. You have to have, you have to have, it has to be a board that's independent of him that represents the shareholders, period. And I think she found this board one independent. And listen, it resulted in negotiation, a fair negotiation where both sides are. trying to maximize their own position, usually you get to the right place. And there's no set

number. Right. I doubt a real negotiation would produce numbers like this. Put it that way. Yes. Well, we really appreciate your time, Charles. I hope to have you on again, again soon. Always fun. Good soon. You take care. Bye-bye. Bye-bye. That was Charles Ellson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware. I asked Charles what he thinks

is a reasonable compensation package for Elon Musk. We got his answer, but we'd be interested to hear what you think, too. What do you think is the right pay package for Elon? Let us know in the comments.

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We're back with Profji markets. Trump's praise for a controversial ad has sent a retailer's stock soaring. Shares of American Eagle surged more than 23% yesterday after he applauded the brand's campaign featuring Sidney Sweeney. He wrote on Truth Social, quote, Sydney Sweeney, a registered Republican, has the hottest ad out there. It's for American Eagle, and the jeans are flying off the shelves.

Go get him, Sidney. End quote. Now, why is he even talking about this? Well, I'm sure you know, but as a reminder, American Eagle launched this ad campaign titled, Sydney Sweeney has great jeans. Jeans are passed down from parents to offspring.

Often determining traits like her color, personality, and even I color. My jeans are blue. Sydney Sweeney has great jeans. The ad got some backlash online. It prompted yet another culturally and racially charged debate. And then when Trump learned about Sidney's political affiliation, apparently she's a Republican, he obviously had to get involved. Now, I have to be honest.

I don't care about this debate. all. I think it's dumb, and I think it's a waste of time. However, I do care about the way in which the markets are now playing a role in this debate and debates like this. The fact that American Eagle can accrue over $400 million in market cap in one day just because it is the subject of this cultural controversy. That is new. And I don't know exactly what to make of it, but I do know that it says something about this current moment in the markets. So to help us unpack this, our producer Claire spoke with Kyla Scanlan, author of In This Economy, How Money in Markets Really Workers.

All the memes have been on a big tear recently, like any sort of attention, or like Krispy Kreme or Go Daddy, and the stocks are ready to roll. It seems like there's some excess capital in the markets that is able to to go into these meme stocks. And with the American Eagle situation, I'm not surprised because Trump, President Trump is such a good attention harvester that essentially whenever he touches, you know, it's going to go up in price. Trump coin is a key example there. And so it makes a lot of sense of this happened and that people would see him tweeting about it as a catalyst for the stock. Do you think American Eagle planned for this kind of reaction? Do you think they saw it coming at all?

or did they sort of just stumble into this attention economy and play it well? Controversy is a commodity. And so if you can make a lot of people mad, you're probably going to have some elements of success because everybody's so polarized that you're going to please one side, probably. And so I don't know if it was intentional on American Eagles part. It doesn't seem so. There's a lot of debate online deciding if it is or not. And essentially, I think anyone can attach their own answer to that.

but they even if it wasn't intentional it definitely did a job it's almost like controversy is this cheat code in the attention economy but my question is will it actually translate to a sustainable strategy and convert into brand equity for american eagle i mean trump was saying jeans are flying off the shelves i don't know if any of that's true but do you think it could you know translate into actual sales for them? They lost almost $70 million in their first quarter of 2025 as a company. So I don't know if that a controversial ad is going to help them gain $70 million. I think that when we look at stocks that kind of play or companies that play this controversy line, like maybe Rumble, for example, they don't tend to do that well. And so I think it kind of works as a short-term boost, but it often doesn't translate into any real business fundamental. I think what's going on with American Eagle right here is a great example of a

stock not necessarily reflecting the underlying company. The stock market is divorced from everyday experiences increasingly, like just does not reflect underlying fundamentals at all for a lot of companies. And I think just this American Eagle situation is case and point for that. Final question. What do you make of the market's reaction to the latest with Trump throwing his support behind the ad? Do you think the market's saying, yes, we're into this anti-woke moment? Or is it more like traders are saying, this is ridiculous, hilarious, weird, we just want to make it even crazier and run the stock up? I mean, it's interesting because I don't even know if it was an anti-woke moment. Like the campaign was supposed to support a domestic violence charity. Right. And so it seems like everybody just skewed the narrative, totally out of control. But I think that for finance people, they see an opportunity in it. And there's a meaning about it. You know, Trump is tweeting about it. And so there's a lot of power behind that. And so I think the market is just looking for any sort of catalyst.

That was Kyla Scanlan, author of in this economy and also a frequent guest on Prof G markets. Whatever you think of the ad, I think it's important to simply observe. what it has done to the stock price. To Kyla's point, it is just indisputable the extent to which attention has taken on a life of its own in our economy. Attention isn't just noise in the economy. It is the economy. And in a lot of ways, it doesn't really matter how you get it. It could be through controversy or through outrage or even a simple meme. It doesn't really matter. All that matters is that you obtain it. That's what matters today. We saw it with GameStop, we saw it with many of the stocks that Kyla mentioned, we saw it more recently with Astronomer and that whole

Coldplay concert CEO debacle, and we're seeing it again today with American Eagle and Sidney and now Trump. Now, does that mean American Eagle is a good investment? No, not at all. In fact, I'm waiting for the stock to come crashing back down. But it also doesn't mean that the stock couldn't rip another 50% this week. All it would take is another tweet from the president or another meme from the White House, and you could see another several hundred million dollars in market value created overnight. That is genuinely possible, and that is just the world we live in. And the question is whether you really want to participate in that as an investor.

me personally I'm good I have no interest in participating but it is certainly true the world of meme stocks is expanding and this combined with everything we've seen over the past few months is proof that the world of meme stocks is not going anywhere okay that's it for today

thank you for listening to Prof G Markets from the Vox Media Podcast Network I'm Ed Elson I'll see you tomorrow Lifetimes You have me in kind reunion